In this article, we discuss the 20 under the radar AI stocks.
Artificial Intelligence (AI) has become increasingly vital across various industries, including some under the radar sectors like utilities, mining, and media. AI tools are driving efficiency, safety, and innovation in these domains. In the utilities industry, AI is playing a critical role in enhancing the efficiency and reliability of power generation, distribution, and consumption. One significant application is in predictive maintenance, where AI algorithms analyze data from sensors embedded in infrastructure such as power grids and pipelines. This allows for early detection of potential failures, reducing downtime and maintenance costs. For example, a report by McKinsey & Company estimates that AI-driven predictive maintenance can reduce maintenance costs by up to 40%, extend the life of assets by 20%, and decrease unplanned outages by 50%.
Read more about these developments by accessing 33 Most Important AI Companies You Should Pay Attention To and 20 Industrial Stocks Already Riding the AI Wave.
The mining industry, traditionally labor-intensive and hazardous, is also seeing significant benefits from AI. One of the most impactful applications is in automation and autonomous operations. AI-powered autonomous vehicles and machinery are now commonplace in large mining operations, reducing the need for human presence in dangerous environments. According to a report by PwC, the use of autonomous haulage systems (AHS) in mining can lower operational costs by up to 15% while increasing productivity by 20%. AI is also enhancing mineral exploration and resource estimation. Machine learning algorithms can analyze geological data to identify potential mining sites with higher accuracy and less time than traditional methods. This not only reduces exploration costs but also minimizes environmental impact by focusing efforts on the most promising areas.
In the media industry, AI is revolutionizing content creation, distribution, and consumption. AI-driven algorithms are increasingly used to personalize content recommendations, which is vital for streaming platforms. These algorithms analyze vast amounts of user data to predict preferences, keeping users engaged and boosting subscription rates. According to Netflix, its recommendation engine, powered by AI, saves the company over $1 billion annually by reducing churn and increasing viewing hours. Moreover, AI is crucial in combating digital piracy and protecting intellectual property. Machine learning algorithms can scan the web for unauthorized distribution of content, allowing companies to take down pirated material swiftly. The global AI in media and entertainment market is expected to reach $100 billion by 2030, growing at a CAGR of 27% from 2023 onwards, underscoring the importance of AI in this rapidly evolving industry.
Read more about these developments by accessing Billionaire Stan Druckenmiller Is Betting On AI Infrastructure, Tobacco and Industrial Stocks and 10 Tech Stocks to Monitor Amid Market Volatility According to Bernstein Analyst.
Our Methodology
For this article, we selected AI stocks that have been in the news this week. A recent investment note from investment bank Goldman Sachs regarding under the radar AI stocks was also used for this article. These stocks are popular among hedge funds as well. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
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Under The Radar AI Stocks
20. Nano-X Imaging Ltd. (NASDAQ:NNOX)
Number of Hedge Fund Holders: 6
Nano-X Imaging Ltd. (NASDAQ:NNOX) develops a commercial-grade tomographic imaging device with a digital X-ray source. The company is a pioneering force in the X-ray machine industry, having developed an imaging device that is smaller, more cost-effective, and more efficient than traditional models. Management anticipates a significant increase in sales for these devices in the upcoming quarters. Additionally, the firm has integrated AI into its diagnostic processes with a system called NanoxAI. This AI-powered technology, which has received FDA approval, aids in interpreting patient scans, detecting chronic conditions at an early stage, and expediting access to clinical care. The company’s AI solutions leverage a vast database, comprising 30 million patient records, 500 million images, and ten years of patient history.
Nano-X Imaging Ltd. (NASDAQ:NNOX) is attracting the attention of Wall Street analysts with strides in AI-based health solutions. Alliance Global Partners recently started covering the stock with a Buy rating and $12 price target. In an investor note, the advisory highlighted the potential to expand Nanox.ARC placements and generate per-scan revenue that would drive the company to profitability, while also lauding the AI-based systems of the firm.
19. Ivanhoe Electric Inc. (NYSE:IE)
Number of Hedge Fund Holders: 10
Ivanhoe Electric Inc. (NYSE:IE) operates as a mineral exploration and development company in the United States. The demand for copper has increased across the world in the past few months as businesses invest in AI hardware. Nearly all AI devices need powerful chips, and copper forms an essential part of these chips. Earlier this year, the company announced that it would be partnering with mining giant BHP to search for copper and other critical minerals in the southwestern US. The initial area of interest will be in Arizona, New Mexico and Utah. BHP will provide $15 million in initial funding for the project.
Ivanhoe Electric Inc. (NYSE:IE) stock is grabbing the attention of financial analysts. Scotiabank recently lowered the price target on the stock to $14 from $14.50 and kept an Outperform rating, noting that the firm had lowered its near-term commodity price outlook to reflect the impact of weaker global demand, which seemed to be more than offsetting supply-side challenges.
18. Jones Lang LaSalle Incorporated (NYSE:JLL)
Number of Hedge Fund Holders: 21
Jones Lang LaSalle Incorporated (NYSE:JLL) operates as a commercial real estate and investment management company. Christian Ulbrich, the CEO of the firm, outlined during the second quarter earnings call how the AI data center prospects were a tailwind for the stock in the long-term. The CEO underlined that the communications and technology sector had performed better than expected in the second quarter, largely because average lease prices had more than doubled as large tech companies took place to support data center operations. The CEO noted that despite a slower start to 2024 across many markets, demand for high-quality space with sustainable solutions and automated technology was expected to drive long-term growth.
Market experts are bullish about the long-term prospects for Jones Lang LaSalle Incorporated (NYSE:JLL). Raymond James analyst Patrick O’Shaughnessy recently raised the price target on the stock to $268 from $246 and kept a Strong Buy rating, underlining that US capital markets activity was up modestly in Q2, growing 2% year over year, according to MSCI Real Capital Analytics, a meaningful improvement from a 12% decline last quarter and snapped a streak of seven consecutive quarters of y/y declines in capital markets activity.
17. Science Applications International Corporation (NASDAQ:SAIC)
Number of Hedge Fund Holders: 24
Science Applications International Corporation (NASDAQ:SAIC) provides technical, engineering, and enterprise information technology (IT) services primarily in the United States. The company regularly does business with the US Army, specially in the IT domain. Recent news coming out from defense circles indicates that the US Army is planning to ask contractors to assist with the integration of artificial intelligence technology into its operations. As one of the biggest business partners of the US army, SAIC is in pole position to take advantage of such AI-related business contracts.
Science Applications International Corporation (NASDAQ:SAIC) is viewed with caution by Wall Street. Wells Fargo recently lowered the price target on the stock to $129 from $146 and kept an Equal Weight rating, highlighting that the firm expects a steep margin ramp through FY25, and the plan was not without risk. However, the advisory added that if the company could hit guidance, the stock could get more interesting.
16. Clarivate Plc (NYSE:CLVT)
Number of Hedge Fund Holders: 27
Clarivate Plc (NYSE:CLVT) operates as an information services provider in the Americas, the Middle East, Africa, Europe, and the Asia Pacific. The company has beefed up research offerings in recent months with the launch of AI-powered Web of Science Research Intelligence. The firm has also launched two new software solutions, Collecto and Specto. The former enables librarians to more effectively and efficiently manage collections with improved analytics, unified platform and AI. The latter showcases all library digital collections through generative AI, improved workflows and guaranteed long-term access.
Analysts continue to view Clarivate Plc (NYSE:CLVT) with caution. Barclays recently lowered the price target on the stock to $5 from $6 and kept an Underweight rating, noting the company’s Q2 results and lowered fiscal year organic guide once again disappointed investors, and the results and CEO change were a negative read near-term for the shares.
15. Rubrik, Inc. (NYSE:RBRK)
Number of Hedge Fund Holders: 28
Rubrik, Inc. (NYSE:RBRK) provides data security solutions to individuals and businesses worldwide. The company offers enterprise data protection, unstructured data protection, cloud data protection, and SaaS data protection solutions. The cybersecurity market is worth hundreds of billions in the modern world, with the potential to expand further as even more data comes online in the wake of the AI revolution. Rubrik has developed a focus on data resilience within this domain, and this sets it apart from competitors in the market. The data resilience market has a total addressable value of close to $56 billion. The firm has rapid growth and high-margin recurring revenue stream, suggesting a faster than normal path towards profitability.
Rubrik, Inc. (NYSE:RBRK) has enormous growth potential and analysts on Wall Street have recognized this. Piper Sandler recently initiated coverage of the stock with an Overweight rating and $42 price target, terming the stock one of the top investment ideas. In an investor note, the advisory noted that next-generation vendors were replacing legacy vendors, and tailwinds like ransomware, artificial intelligence and backup-as-a-service were driving shifts to vendors like Rubrik. The advisory sees the company growing 20% per year sustainably.
14. Tetra Tech, Inc. (NASDAQ:TTEK)
Number of Hedge Fund Holders: 37
Tetra Tech, Inc. (NASDAQ:TTEK) provides consulting and engineering services in the United States and internationally. Joseph Fong, a high-level executive at the firm, underlined the importance of Tetra Tech in the AI revolution during the second quarter earnings call. Fond noted how the US government had approved $200 billion to set up fabrication manufacturing across the country. These facilities, per Fond, needed the production of ultrapure water that was essential for the ultrathin processing with silicon wafers used to create computer chips. He also said his firm was developing a liquid cooling solution for AI data centers.
Tetra Tech, Inc. (NASDAQ:TTEK) has received bullish calls on Wall Street. RBC Capital recently raised the price target on the stock to $259 from $233 and kept an Outperform rating, noting the firm posted better-than-expected Q3 results and the 3rd straight upward revision to FY24 guidance, and remains well positioned to drive organic growth and further margin improvement, while the balance sheet provides optionality on capital allocation.
13. News Corporation (NASDAQ:NWSA)
Number of Hedge Fund Holders: 41
News Corporation (NASDAQ:NWSA) is a media and information services company that creates and distributes authoritative and engaging content, and other products and services for consumers and businesses worldwide. The company beat market expectations on earnings per share and revenue in the fourth fiscal quarter. During the earnings call, Robert Thomson, the CEO, said that a landmark agreement with OpenAI was not only expected to be lucrative, but would enable the firm to work closely with a trusted, pre-eminent partner to fashion a future for professional journalism and for provenance. He also said his firm was taking legal steps against AI aggressors who were predatory in the confiscation of content.
Earlier this year, News Corporation (NASDAQ:NWSA) had signed an agreement with OpenAI, the California-based AI startup that launched ChatGPT back in late 2022. Under the terms of the deal, OpenAI would have permission to display content from News Corp in response to user queries. The startup would have access to new and archived content. Some prominent publications that are part of News Corp include The Wall Street Journal, New York Post; The Times, The Sunday Times and The Sun, among others.
12. R1 RCM Inc. (NASDAQ:RCM)
Number of Hedge Fund Holders: 42
R1 RCM Inc. (NASDAQ:RCM) provides technology-driven solutions that transform the patient experience and financial performance of hospitals, health systems, and medical groups. The firm purchased Cloudmed in 2022 and is likely to leverage the technological focus and access to data of the latter to advance an AI program that aims to automate processes to drive further efficiency of economics to be shared with customers. Recent news in this regard is positive. The company has partnered with tech giant Microsoft to improve billing coding productivity. 95 out of 100 top hospitals in the US are customers of Cloudmed,
R1 RCM Inc. (NASDAQ:RCM) purchased Cloudmed in a deal worth $4 billion. With the integration of Cloudmed, R1 can use artificial intelligence and automation to analyze large volumes of medical records, payment data and complex medical insurance models to identify opportunities to deliver additional revenue for healthcare providers. Cloudmed partners with more than 3,100 healthcare providers and helped recover more than $1.5 billion of underpaid or unidentified revenue for clients annually.
11. ZoomInfo Technologies Inc. (NASDAQ:ZI)
Number of Hedge Fund Holders: 43
ZoomInfo Technologies Inc. (NASDAQ:ZI) owns and runs a market intelligence platform. After missing market estimates on earnings for the second quarter, the firm is hoping that new AI features would help it recapture the growth trajectory that has slowed down in recent months. These new features, named ZoomInfo Copilot, are aimed at resuscitating the sales momentum. Some important generative AI features that come bundled in the Copilot include AI-driven recommendations and ratings for prospective customers, as well as the ability to draft emails to clients.
ZoomInfo Technologies Inc. (NASDAQ:ZI) has a lot of admirers on Wall Street. Canaccord analyst David Hynes has a Buy rating on the stock with a price target of $14. In a recent investor note, the advisory noted that there was a mix of good and bad in ZoomInfo’s Q2 results but after sifting through all the noise that accompanied this quarter, execution at the upper end of the market actually sounded a bit better than it has in recent periods.
10. Guidewire Software, Inc. (NYSE:GWRE)
Number of Hedge Fund Holders: 43
Guidewire Software, Inc. (NYSE:GWRE) provides a platform for property and casualty (P&C) insurers worldwide. Recent reports suggest that the company has participated in a funding round for Indico Data, a startup that uses AI to provide solutions for automating critical intake workflows across the policy lifecycle. Other investors in the funding included Sandbox Industries, Osage Venture Partners, and Jump Capital. The company handsomely beat market expectations on earnings per share and revenue for the second quarter back in June, showcasing financial prowess as many other software stocks struggled.
Wall Street analysts are bullish on the future prospects of Guidewire Software, Inc. (NYSE:GWRE). BTIG analyst Matt VanVliet recently raised the price target on the stock to $165 from $140 and kept a Buy rating, backing the company to deliver upside to current Street estimates in the fourth quarter earnings based on strong recent GWCP bookings momentum and positive commentary in its fieldwork discussions.
9. Nutanix, Inc. (NASDAQ:NTNX)
Number of Hedge Fund Holders: 48
Nutanix, Inc. (NASDAQ:NTNX) provides an enterprise cloud platform in North America, Europe, the Asia Pacific, the Middle East, Latin America, and Africa. The recent purchase of VMware by Broadcom has created growth opportunities for the firm, helping it land mega customers like Cisco and Dell, with more on the way, as important businesses showcase their concern around acquisition uncertainty and the in-house changes that follow such deals. The firm also recently released second quarter earnings, beating market shares on earnings per share and revenue by $0.07 and $10.6 million respectively.
Nutanix, Inc. (NASDAQ:NTNX) is viewed positively by market experts on Wall Street. Bank of America recently raised the price target on the stock to $75 from $72 and kept a Buy rating, stating that the company had again delivered a strong quarter. In an investor note, the advisory noted that the sales pipeline of the firm continues to have a higher mix of larger deals and there was an opportunity for share gain against VMWare and long-term upside potential.
8. MongoDB, Inc. (NASDAQ:MDB)
Number of Hedge Fund Holders: 54
MongoDB, Inc. (NASDAQ:MDB) provides a general purpose database platform worldwide. The company recently posted earnings for the second quarter of 2024, beating market expectations on earnings per share and revenue by $0.22 and $13.8 million respectively. Dev Ittycheria, the CEO of the firm, said during the earnings call that the firm was excited about the opportunity to continue capturing share in one of the largest markets in software, and was incredibly well positioned to help customers incorporate generative AI into their business and modernize their legacy application estate.
MongoDB, Inc. (NASDAQ:MDB) has earned bullish reviews on Wall Street. DA Davidson recently raised the price target on the stock to $330 from $265 and kept a Buy rating, noting that the company reported a strong Q2 earnings beat driven by stronger than expected consumption growth trends in Atlas as well as strong Enterprise Advanced upside, highlighting that the firm was also boosting its FY25 EPS view by 17c to $2.47 and its FY26 view by 7c to $2.90.
7. Coupang, Inc. (NYSE:CPNG)
Number of Hedge Fund Holders: 62
Coupang, Inc. (NYSE:CPNG) is a South Korea-based ecommerce firm. The company was recently included into a basket of under-the-radar AI stocks that investment bank Goldman Sachs thinks will reap long-term benefits from the AI revolution. Coupang was one of the first retailers to use AI and machine learning to improve the ecommerce side of the business, setting the company apart from the competition. Coupang uses AI and machine learning to increase inbound efficiency, predict order volume, and improve the algorithms on its main app. AI also runs the fulfillment centers of the ecommerce giant with minimal human involvement, showcasing leadership in the IT space.
Expert investment advisors on Wall Street are bullish on Coupang, Inc. (NYSE:CPNG) stock. JPMorgan has an Overweight rating on the shares with a $28 price target. In a recent investor note, the advisory mentioned the 140 billion won fine leveled on the firm by authorities in South Korea earlier this year. The fine was imposed for alleged manipulation of search listing algorithms in favor of the own products of the firm. In the note, the advisory noted that the regulatory repercussions for the business may weigh on investor sentiment in the near term.
6. Cadence Design Systems, Inc. (NASDAQ:CDNS)
Number of Hedge Fund Holders: 64
Cadence Design Systems, Inc. (NASDAQ:CDNS) provides software, hardware, services, and reusable integrated circuit (IC) design blocks worldwide. In addition to offering chip firms services related to chip design, the company has made a name for itself in the field of physical simulation. For example, the company has designed AI supercomputers that are specially designed to simulate certain physical environments, like the air flow above jet aircraft, in order to enable companies to design and engineer higher quality products. These physical simulations require very high computing power that only AI chips can handle.
Cadence Design Systems, Inc. (NASDAQ:CDNS) has earned bullish calls from Wall Street as a result. Piper Sandler recently upgraded the stock to Overweight from Neutral with an unchanged price target of $318. In an investor note, the advisory stated that the recent selloff presented an attractive entry point in a premier software asset with an enviable position in the semi industry.